A farmer in Muktsar has accused a State Bank of India branch in the district of not allowing him to withdraw old age pension allegedly because interest on his farm loan was not paid, a charge the bank has denied.

The accusation by Bohar Singh of Gurusar village in Gidderbaha comes amidst reports that several farmers in the state have stopped clearing their loan dues in anticipation of debt-waiver implementation.

The bank said it was unable to allow the withdrawal of Rs 1,500 as pension because the amount "has not been credited" by the state government.

"How can we disburse pension when it has not been credited (by the state government)," said Raghav Gupta, Deputy Manager, SBI Gurusar branch.

Singh has, however, claimed he was asked to first clear Rs 3,500 interest on Rs 1.05 lakh loan and the pension amount could be released.

Raghav Gupta also said the farmer's pension and loan account is same. The bank's system will not allow disbursal unless the outstanding amounts on the account is cleared, he explained.

The farmer has been asked to open another account for receiving pension, the senior bank official said.

The Congress-led government has already announced debt waiver in cases where total loan is up to Rs 2 lakh for small and marginal farmers (up to 5 acres), and a flat Rs 2 lakh relief for all other marginal farmers, irrespective of their loan amount.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)